“Point & Counter-point with Bob Lucky” Gordon Bell Microsoft May 5, 1998 The 1998 Bellcore Forum: * Competing in the Millennium: Vision, Innovation, and Delivery *Audience response was used for this presentation, and the attendees from Bellcore, LECs, CLECs, IECs/IXCs, Cable companies, and equipment suppliers were polled. The %s indicate the results of these polls. 1998 Bellcore Forum
Predicting future telecom services or lack thereof Introducing the Internet and Web driver n Cyberspace… the quest and vision … my opinion n Laws of Prediction … or how to understand the technology of our future n The big telecommunication bets… if we could only forecast the future n Overthrowing the incumbents… a plan* *Appended to the original talk. 1998 Bellcore Forum n
By January 2001 there will NOT be 1 billion people on the “net”. Bet: Nicholas Negroponte $1 K: $5 K… it happens by 2002. Also $1 T of commerce by 2001. Bet: Me? 77% 1998 Bellcore Forum NN? 23%
Why this is the keystone bet! n It determines the market – – n It says something about the utility – – – n for networks for access devices… especially PCs commerce communication entertainment Increased network capacity & ubiquity enables – – phones videophones television serendipity 1998 Bellcore Forum
Interneters growth 10000 1000 World Population TVs & Phones “ 1 Gp by 2000” Negroponte PCs 100 Internetters 10 ‘ 95 ‘ 96 ‘ 97 ‘ 98 ‘ 99 ‘ 00 ‘ 01 ‘ 02 ‘ 03 ‘ 04 1998 Bellcore Forum
Interneters growth 12000 10000 8000 6000 4000 2000 0 ‘ 95 World Population extrapolated at 1. 6% per year Internet Growth extrapolated at 98% per year ‘ 96 ‘ 97 ‘ 98 ‘ 99 ‘ 00 ‘ 01 ‘ 02 ‘ 03 ‘ 04 1998 Bellcore Forum
1998 Bellcore Forum
Growth in hype WWW Infoway promise: “how great it’ll be” (politicians, academics, etc. ) books, Infoway newspapers regulation Infoway addiction conferences lawsuits 1998 Bellcore Forum Data from Gordon’s WAG
Articles about security, privacy, & fraud versus commerce ($M) actual commerce articles about risk and NOT doing commerce pornography, crime, FUD, etc. articles 1998 Bellcore Forum Data from Gordon’s WAG
Real growth in commerce? 1998 Bellcore Forum
ce ss --> c >B ap W ac. pa re c. sp (s on vc se ) Internet (IP) ubiquity Ca Ex Us de er ma nd & Ap in pli no ca va tio n n The Virtuous Cycle that drives the BW quest 1998 Bellcore Forum
“ If we couldn’t predict the Web, what good are we? ” Bob Lucky, Vice President Bellcore, 1995 1998 Bellcore Forum
Exponentials change everything … you can’t see ‘em coming! 1998 Bellcore Forum
Business Week even makes fun of Telecom… because you can see them coming 1998 Bellcore Forum
Business Week doesn’t know… Satellite isn’t an a B/W option Phone CATV Satellite… 1998 Bellcore Forum
Why phone guys hate computer guys 0. Where would they be without the transistor, RJ 11 and UNIX that you de-standardized? 1. They’re nouveau rich we’re old money. 2. We brought ISDN to the party, nobody came. 3. They’re IP’ing on us including phones! 4. Packets don’t make links fatter or faster. 5. All they want is free, high bandwidth, 24 hour a day phone calls. Why do they need bandwidth? They have nothing to show. 6. Don’t talk service. I reboot my PC every day. Ever have to reboot your phone? 7. Just wait till the governments get on their case. 1998 Bellcore Forum
Agenda… predicting and forecasting n n n Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan 1998 Bellcore Forum
Let’s look at Cyberspace 1998 Bellcore Forum
Cyberspace: A Network of. . . Networks of. . . Continent Body Region/ Intranet Campus Home World 1998 Bellcore Forum
Cyberization: interface to all bits and process information n n Coupling to all information and information processors Pure bits e. g. paper, newspapers, video Bit tokens e. g. money, stock State of: places, things, and people State of: physical networks 1998 Bellcore Forum
Network Interface Platform, Interface, & Network Computer Class Enablers “The Mini & Computer” Timesharing Mainframe PC/WS Web browser, telecomputer, tv computer tube, core, SSI-MSI, disk, micro, floppy, PC, scalable drum, tape, timeshare disk, bit-map servers, batch O/S display, mouse, dist’d O/S direct > batch terminals via commands WIMP Web, HTML POTS LAN Internet 1998 Bellcore Forum
“Everything will be in Cyberspace” Is this a challenge? goal? quest? fate? … or n Cyberization enables new computing platforms that require new networks to connect them n Infrastructure supports the content – Three evolutionary dimensions – 1998 Bellcore Forum
All the platforms we have and will inevitably build have to be totally interconnected to have Cyberspace. That’s your job! The price has to be right… you cannot count on voice revenue forever! Bellcore Forum 1998
Connecting all these plain old computers into Cyberspace… an opportunity 1998 Bellcore Forum
Mobile videophone 1998 Bellcore Forum
Honda Robot 1998 Bellcore Forum
People surrogates 1998 Bellcore Forum
Steve Mann in Cyberspace 1998 Bellcore Forum
Medtronics Implanted Cardioplastic 1998 Bellcore Forum
For openers… audio, pix, T, P, ECG, location… 1 GB 1998 Bellcore Forum
Not shown: ECG; GPS; Compass; altimeter PCS; Pilot Libretto, . 5 mm pencil 1998 Libretto PS, Ricoh Camera; Swiss Army Bellcore Forum Knife
Cyberspace: one, two or three networks? in 2005, 2010, 2020 Data Telephony Television 1998 Bellcore Forum
DVD >97 Game Cons. Television Cable world Cable Broad- VCR cast DBS ITV? RADIO Telephony Wireworld less phone CLEC IEC Cable PBX I’net Phone The LAN Internet PBX I’net RADIO x. DSL TV The Worlds of TV, Telephony Datacom a. k. a. Computing & Internet ISP Pvt. Intranet WAN Extranets Wire& LAN less Datacom world 1998 Bellcore Forum
Cyberspace: A spiraling quest in 3 D real space Computation Communication Cyberization Programs, Content & messages 1998 Bellcore Forum
Agenda… predicting and forecasting n n n Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan 1998 Bellcore Forum
On prediction…and betting why historically have we been right or wrong? 1998 Bellcore Forum
“ market for maybe five computers. ” I think there is a world Thomas Watson Senior, Chairman of IBM, 1943 1998 Bellcore Forum
Harvard Mark I aka IBM ASCC 1998 Bellcore Forum
Predictions require some history. The computer hadn’t been invented. n Watson’s prediction held for 10 years. n è You need history to predict. 1998 Bellcore Forum
Moore’s Law vs Moron’s Law for prediction… differences in Cyberspace perception 1998 Bellcore Forum
Moore’s Law 60%/yr. Memory -- 4 x size every 3 years 10 G 1 G 100 M 1 M 100 K 1 K 0. 1 K 1970 1980 1990 2000 2010 1998 Bellcore Forum
Extrapolation from 1950 s: 20 -30% growth per year Tera Giga Storage Backbone Processing Memory ? ? Mega Kilo 1 1947 Telephone Service 17% / year 1957 1967 1977 1987 1997 2007 1998 Bellcore Forum
1998 Bellcore Forum
Moron's Law (cf. Newton) “the residual effects of regulation ensure that telecom carriers will never provide what the customer wants and … it comes five years too late. ” --venture capitalist Roger Mc. Namee. “Computer folks. . . fear that Moron's Law will trump Moore's and stunt the revolution's growth over the next 30 years. ” 1998 Bellcore Forum
Newton's First Law. Bodies at rest. . . n n n LECs, PUC and FCC are at rest, supplying assuredly profitable (by definition) local service. Cable TV raises prices to cash out CLECs and IECs “cherry pick” lucrative corporate (not consumer) local service LECs see reduced revenue and profit LECs, PUCs, and FCC raise prices LECs downsize to remain at rest, buy cable and CLECs to remain. Forum 1998 Bellcore at rest & maintain monopoly
Electricity and LECs to Merge Wires to the home … Guys and trucks Poles and holes… Same customers Geo-monopolies PUC interaction Core competency: lobbying 1998 Bellcore Forum
Why computer guys hate phone guys 0. Ads say “someday you will”. Just do it! 1. All they give us is POTS to IP on. 2. It’s not the price of bandwidth (that they said would be free) … it’s the availability 3. They won’t buy packet switching. Computers let everyone be telecoms. They’ll pay. 4. The net is the net. Services are services. Content is content. Stop trying to own ALL. 5. Telephone quality is an oxymoron. With 64 kbps, we should be getting CD quality. 5. Name any monopoly that has love & respect 6. It’s taken 35 years to 1998 Bellcore Forum learn that computer calls last 24 hours/day, not 5 minutes.
1998 Bellcore Forum
Why no one likes cable guys 0. But you just increased my rates 1. They don’t even own the poles or holes. They’re just schmucks in trucks. 2. They are too close to the broadcast industry and that eliminated logic. 3. We’d all like to be unregulated too then we can raise rates faster and do whatever we want. 1998 Bellcore Forum
Telecom View of Cyberspace: We will tell you the services. Subscribers The Network and all the Sevices you would ever want. 1998 Bellcore Forum
Silicon Valley View of Cyberspace: provide a switch and entrepreneurs will create the services Subscribers All the Services you might or might not want Worldwide mostly IP Switch 1998 Bellcore Forum
Telecom Equipment Industry 1998 Solutions Applications OS AT&T Nortel Siemens ROLM NEC Computers Switching/ DSP 1998 Bellcore Forum
Future Telecom Industry Applications Ericsson, Aspect, Nortel, Octel, others Applications Microsoft, Delrina, many others Databases OS Informix, Microsoft, Oracle, Sybase, others Microsoft, Apple, Sun, Novell, LINUX Switching Ericsson, Nortel, Bay, 3 Com, Fore, others Computers Compaq, DEC, Dell, IBM, many others DSP Processors Dialogic, NMS, Rhetorex, others Intel, AMD, Motorola, others 1998 Bellcore Forum
Computer vs Telecom Proc. & mem 2 x/1. 5 yr Access B/W 2 x/4 yr Trunk BW 2 x/ 9 mos. Prices decline Prices increase Email, web, audio, etc. Voice, voicemail, fax Packet switching… Circuit switching. . . … will too, do voice! …is required for voice 64 Kbps gives great audio Telephone Quality Voice … is an oxymoron IP ATM, ISDN & POTS Fungible bits for Unique bits and phone fax data tv… ala carte pricing Connect & bits go free. Billing & lawyer costs Just give us any old net! We want it all: we’ll compute the rest net, nodes, content Technology-based …its Lobbying-based … its Information Services Telecommunications 1998 Bellcore Forum Moore’s Law Moron’s Law
The beginning of the end… or a new beginning? “You have to separate the hype from the reality. We have customers, real customers paying hundreds of millions of dollars to us today. When you look at Level 3 and Qwest, how many customers do they have? ” ---- R C Notebaert, Ameritech “We’re not going to wake up and find our voice business is gone” --- M Turner, US West 1998 Bellcore Forum
A technology e. g. packet switching can come from nowhere and wipe you out! n MOS memories and micros were introduced in 1972. n By 1976, MOS memories wiped out core memories. 1998 Bellcore Forum
“ There is no reason anyone would want a computer in their home. ” Ken Olsen President, Chairman and founder of Digital, 1977 1998 Bellcore Forum
Equating yourself to the average “user/buyer” is risky. . . unless you’re an average user. 1998 Bellcore Forum
“ ISDN will be ubiquitous by 1985. ” Irwin Dorros, VP Long Lines ATT, 1981 “ Unfortunately we’re stuck with ISDN speed using POTS for the next 5 years. ” Gordon. Bellcore Forum 1998 Bell, ACM 1997
Network bandwidth becomes available slower than the most conservative prediction. 1998 Bellcore Forum
“ AT&T will not have screwed up its purchase of NCR by 1996. ” Robb Wilmot, advising Robert Allen in 1992 ($100) 1998 Bellcore Forum
We under-estimate the devastating power of companies & planners, lawyers & government, to foul up predictions. But to really foul up requires an econometric and market models! 1998 Bellcore Forum
“ By 1997 Video-on-Demand will be available and operating in six cities ” When will this happen? 2000 8%, 2005 46%, 2010 25%, never 21% Raj Reddy & Ed Lazowska 1992 (winners get fed) 1998 Bellcore Forum
“ By April 1, 2001 videophones will ship in 50% of the PCs and be in 10% daily use. Will this happen by: 2001 25%, 2005 50%, 2010 18%, 2015 3%, never 4% Gordon Bell vs Jim Gray 1996 (one paper, loser gets fed) 1998 Bellcore Forum
Always bet against the optimistic researcher. They are wrong in the short term, but ultimately right. 1998 Bellcore Forum
“Build it and they will come” Vision: Provide bandwidth and they will come to share supercomputers, do telemedicine, telescience, ship pictures around. Traffic continues to double. n The web was serendipity! n "A user. . . would build a process and launch it into the network. . . with explicit instructions about things to look for and what to do …. " n 1998 Bellcore Forum
1998 Bellcore Forum
If you do the right thing, serendipity works! 1998 Bellcore Forum
NCs will NOT outsell PCs 9: 1 by 2000. … NCs include those embedded in TV sets, phones, and used as PC alternatives. Bet with Larry Ellison, CEO Oracle: While the devices connected to the web (e. g. instruments, cameras, appliances, printers, phones, and television sets) may be greater than PCs, the number of personal access devices that are NOT PCs will be less than 9: 1. 1998 Bellcore Forum
Don’t bother betting where the goal is just PR. It is safe to bet against Larry Ellison even if he has lots of money. Elllison bought Ncube. It failed as an MPP computer, failed again as a database engine, and finally failed as a video-on-demand server. 1998 Bellcore Forum
Observations on predicting n n n n Existence proofs are essential, otherwise it’s faith and luck. Numbers and data are our friends to use. Bet against the optimistic researcher. They are ultimately right, while initially wrong. Bet on predictors who are grounded, intuitive, imaginative, and lucky. Because it could, doesn’t mean it will. It’s usually just the economics, stupid… look there first! Don’t count of Newton’s First Law… because greed (an outside force) usually beats fear (inertia). 1998 Bellcore Forum
What percent of biz traffic by contacts, (not traffic) will be: Item Bell/Lucky 1994 2000 Fax 11 10 7 10 Voice 15 50 15 30 Voice/Video confer 2 2 10 10 Overnite mail 2 3 1. 5 5 Snail mail 20 25 10 25 Email 50 10 56 30 Newspaper? Web? 1998 Bellcore Forum Television?
Agenda… predicting and forecasting n n n Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan 1998 Bellcore Forum
Some of my recent bets! Would you bet with me? 1998 Bellcore Forum
PC growth is not stalled. . . Bet: (Walt Mossberg, WSJ) There will be continued growth of PCs (I. e. things that run Windows, NT, or CE) at a double digit rate for until 2001. Bet with me? 87% With Mossberg? 13% 1998 Bellcore Forum
Web will reach 50% of the U. S. households. . . Negroponte predicts 1 Bp and $1 T/yr of commerce by 1/2001. Bet: with Dave Nagel, AT&T one dinner The web will reach 400 M world-wide users OR 50% of U. S. households by end of 2001. Do you bet with me? 57% Nagel? 43% 1998 Bellcore Forum
One million people will access the web via TV sets. . . Bet: : At least one million users will access the web/internet via their television sets by the end of 2001. Via: phone line, 16% x. DSL 19% cable modem 17% settop box/cable 39% not at all 9% 1998 Bellcore Forum
Average bandwidth to homes will not soon be huge… High bandwidth links are being delivered today in trials of 10 K+ using cable & x. DSL. Bet: The average bandwidth to all U. S. homes with PCs will be <56 Kbps in 1/2001. The availability of bandwidth coming to consumers and small businesses by 1/2001 via Cu twisted pair aka LECs or IECs will be comparable to ISDN today. <56 Kbps 71% >128 Kbps 29% 1998 Bellcore Forum
A gigabit net will not be in place for research users… Bet: Raj Reddy et al … fine food & drink 10 K users at 10 sites of > 500 users/site in 3 states will NOT interconnect through a gigabit path by the end of 2000. Do you bet with me? 65% Or with Raj? 35% Based on market need, this service will be available by: 2000 10%, 2005 53%, 2010 29%, 2020 5%, never 4%. 1998 Bellcore Forum
Telepresentations will be a well-defined app by 2001. ACM 97 aka its 50 th on March 3 -5, 1997 was the first telepresented conference with Mbone multicast and servers Bet with Denise Curruso, NY Times More people will view conferences that are made telepresent from Cyberspace than those attended it in meatspace by 2001. Note this bet was won within 6 months. Bet: Even this meeting will be telepresented by 2001 37%, 2005 35%, 2010 10%, never 18% 1998 Bellcore Forum
ACM 97 (Mar. 1997) attendee poll… what’s your opinion? By 2047 will the majority telecommute? (68% of ACM attendees said yes) Will representative democracy be replaced by electronic participatory, democracy by 2047? (ACM: 38% yes) TV, the internet and telephone will converge by 2002 (ACM) !… clearly 1998 Bellcore Forum optimistic and very wrong
Let’s poll (forecast) when certain events will (or will not) happen 1998 Bellcore Forum
Forecast of Internet Telephony & Videotelephony IP will carry $2 B of existing voice or fax traffic by: 2001, 2005, 2010 IP will carry 20% of existing voice or fax traffic by: 2001, 2005, 2010 IP will carry 50% of voice and fax traffic by: 2005, 2010, 2020, never *Note email can be used to carry fax 1998 Bellcore Forum traffic, but not visa-versa.
Forecast of x. DSL & CABLE of Internet to US Homes & Businesses x. DSL use will cross-over ISDN installations by 2001 55%, 2005 37%, 2010 8% x. DSL will deliver service to 10 M by 2001 10%, 2005 69%, 2010 22% Cable will provide WWW to 1 Ml by 2001 61%, 2005 31%, 2010 8% Cable will deliver WWW to 10 M by 2001, 2005, 2010 1998 Bellcore Forum
Forecast of convergence? The datacom network (IP) will carry Television programs by 1/2001, 2005, 2010, 2020, never There will be a single net to access the majority of telephony, data, and television sources by 2005, 2010, 2020, never 1998 Bellcore Forum
Forecast of the access device One-half the homes with PCs will be “always on” by: 2001, 2005, 2010, 2020 The main (in units) web access device in 2001 will be: the PC, Telecomputer aka videophone, Set-top, TV, other The main web access device in 2005 will be the PC, Telecomputer, Set-top, TV, other The main web access device in 2010 will be the PC, Telecomputer, Set-top, TV, other 1998 Bellcore Forum
Agenda… predicting and forecasting n n n Introducing the Internet and Web driver Cyberspace… the quest and vision … my opinion Laws of Prediction … or how to understand the technology of our future The big telecommunication bets… if we could only forecast the future Overthrowing the incumbents… a plan 1998 Bellcore Forum
Ten Niches to the IECs economic support base. Reducing voice revenue is the only avenue for changing the LEC-PUC-FCC controlled access infrastructure! 1998 Bellcore Forum
Overthrowing bandwidth limiting incumbent IECs to get Internet access …ten, critical niches n n n n n Plain Old Cellular replaces POTS 64 Kbps quality audio vs telephony quality Cable for Internet AND voice over IP CLECs aka Competitive LEC suppliers Newcos (e. g. Covad): IP service with x. DSL Startup IP based telephony companies Large users by-pass LECs and use IXCs and IP for inter-organization telephony Fax services over Internet undermines base Bellcore plan for ISPs to provide “telefony” Maintain FCC support FCC for voice over IP without FCC/PUC interference 1998 Bellcore Forum
Telephone Quality Voice is an Oxymoron! We can do better. n n n Analog to digital transition must occur! E. g. a 6 Mhz TV channel can deliver about six higher DVD quality digital channels IECs use 64 Kbps channels to supply approximately 8 kbps, low-quality voice New channels can offer higher quality audio using >33 kbps. Datacom must drive to offer scalable audio bandwidths from 2 kbps-500 kbps 1998 Bellcore Forum
Attack plan for ISPs to deliver voice • According to the rules, ISPs cannot offer telephony if it looks like a telephone • Thee ways that make IP telephony NOT be a telephone: • Increased quality… use all the bandwidth that can be obtained e. g. 33, 56 or whatever to provide high, not telephone quality voice • It is a videophone • It is a computer and conference device 1998 Bellcore Forum
How a New Player or ISP can Attack Incumbents e. g. LECs* • Dial Me Up, Faster and Faster!!!! IXC Internet Backbone Telafony Gateway Voice over IP at 7. 3 Kbps Using Modems ISP+ LEC *courtesy of Bellcore 1998 Bellcore Forum
Plan for Pipes and Wires ATM Switches LEC Network IP Routers LECs are free pipe and wire access providers. IP over ATM lets competitors buildout a network 1998 Bellcore Forum
FCC’s 4/10/98 Report to Congress: How long will it remain? If you use IP to transmit and store information, including telephony (unless it looks like a plain old telephone call), its Information Services. If you use circuit switching (no storage) its Telecommunications (and FCC/PUC controlled) IP Telephony has to look different! Bet: This will hold until 1/2001. 1998 Bellcore Forum
The end 1998 Bellcore Forum
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